PCAR

Wall Street expects a year-over-year decline in earnings on lower revenues when Ford Motor Company (F) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on October 28, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $0.39 per share in its upcoming report, which represents a year-over-year change of -13.3%. Revenues are expected to be $45.67 billion, down 3.2% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 8.81% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Ford Motor, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.34%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Ford Motor will most likely beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Ford Motor would post earnings of $0.33 per share when it actually produced earnings of $0.42, delivering a surprise of +27.27%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Ford Motor appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Automotive - Domestic industry, Paccar (PCAR), is soon expected to post earnings of $1.61 per share for the quarter ended September 2026. This estimate indicates a year-over-year change of +43.8%. Revenues for the quarter are expected to be $7.56 billion, up 23.9% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Paccar has been revised 0.1% down to the current level. Nevertheless, the company now has an Earnings ESP of +1.04%, reflecting a higher Most Accurate Estimate. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that Paccar will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report PACCAR Inc. (PCAR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Paccar (PCAR) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on October 27, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This truck maker is expected to post quarterly earnings of $1.61 per share in its upcoming report, which represents a year-over-year change of +43.8%. Revenues are expected to be $7.56 billion, up 23.9% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.12% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Paccar, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.04%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Paccar will most likely beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Paccar would post earnings of $1.33 per share when it actually produced earnings of $1.43, delivering a surprise of +7.52%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Paccar appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PACCAR Inc. (PCAR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The third-quarter earnings season for the Auto-Tires-Trucks sector kicks off on Oct. 20. Despite rising affordability pressures, the U.S. auto market has remained relatively resilient, supported by fleet purchases and demand from higher-income buyers. Easier access to credit has also helped cushion the impact of persistent inflation and weak consumer confidence. Per the Earnings Outlook report dated Oct. 14, the auto sector's earnings and revenues for third-quarter 2026 are expected to grow 3.4% and 0.6%, respectively, on a year-over-year basis. We have identified — with the help of the Zacks Stock Screener — a few auto players that are set to outshine the Zacks Consensus Estimate this earnings season. These include General Motors GM, PACCAR PCAR, Ford F and Rivian Automotive RIVN. Before we discuss the companies, let's take a look at the factors shaping the quarterly performance. The U.S. auto market continued to show resilience despite affordability pressures. New-vehicle sales declined 0.7% year over year to roughly 4.12 million units in the third quarter, per Cox Automotive. For the first nine months of 2026, sales fell about 2% to 12.06 million units. High fuel prices, persistent inflation and rising living costs have been weighing on household budgets, yet demand has held up better than expected. However, the strength is not evenly distributed. Kelley Blue Book reported that the average transaction price of a new vehicle rose for the fourth consecutive month in September to $50,562, approaching the record of $50,614 set in December 2025. This price environment is increasingly pushing budget-conscious buyers out of the new-car market, while wealthier consumers continue to support sales. Greater access to credit is also helping sustain demand. Fleet purchases are providing another important source of support. They accounted for 20% of U.S. vehicle sales during the first nine months, with government and rental purchases increasing 7%. In contrast, retail sales to individual consumers declined 5%, highlighting the growing importance of fleet demand in offsetting weakness in the consumer market. Electric vehicles (EVs) have also held up better than expected. U.S. EV sales reached 262,649 units in the third quarter, up 6.1% sequentially and marking their strongest quarterly showing since the third quarter of 2025. However, sales remained 39.5% below the year-ago level, but that's a tough comparison period when buyers rushed to purchase EVs ahead of the expiration of federal incentives. While it is not possible to be sure about which companies are well-positioned to beat earnings estimates, our proprietary methodology — Earnings ESP — makes it relatively simple. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can see the complete list of today's Zacks #1 Rank stocks here. Our research shows that for stocks with the abovementioned combination, the chances of an earnings beat are as high as 70%. General Motors: The company has an Earnings ESP of +1.22% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 20. The Zacks Consensus Estimate for General Motors' to-be-reported quarter's earnings and revenues is pegged at $3.52 per share and $48.24 billion, respectively. EPS estimates for the third quarter have moved up by 2 cents in the past seven days. General Motors surpassed earnings estimates in each of the trailing four quarters. General Motors Company price-eps-surprise | General Motors Company Quote GM's vehicle deliveries declined in both key markets in the third quarter of 2026, falling 5.5% year over year to 670,974 units in the United States and 10% to 358,000 units in China. The slowdown could weigh on revenues, although expanding software and digital services may provide some cushion. GM's disciplined pricing strategy is another potential support for profitability. By keeping incentives below the industry average for more than three years, the automaker has avoided aggressive discounting, helping protect margins amid tariff-related costs and inflation. Reflecting this resilience, the Zacks Consensus Estimate for GM North America's operating income stands at $3.28 billion, up from $2.5 billion in the year-ago quarter. PACCAR: The company has an Earnings ESP of +1.04% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 27. The Zacks Consensus Estimate for PACCAR's to-be-reported quarter's earnings and revenues (truck, parts and other) is pegged at $1.61 per share and $7.56 billion, respectively. EPS estimates for the third quarter have moved up by a cent in the past 60 days. PACCAR surpassed earnings estimates in two of the trailing four quarters and matched on the other occasions. PACCAR Inc. price-eps-surprise | PACCAR Inc. Quote Higher truck deliveries are likely to boost PACCAR's results. The company expects to deliver approximately 42,000 trucks in the to-be-reported quarter, implying an uptick of roughly 8% sequentially and 31% on a yearly basis. PACCAR Parts unit is also expected to boost revenues. Additionally, efficient manufacturing and disciplined cost management, PACCAR expects the margin to reach about 14.5% in the third quarter, up from 14.4% in the second quarter of 2025 and 12.5% in the year-ago period. The Zacks Consensus Estimate for PACCAR's Trucks and Parts pretax profit is pegged at $317 million and $468 million, implying year-over-year growth of 209% and 14%, respectively. Ford: The company has an Earnings ESP of +6.56% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 28. The Zacks Consensus Estimate for Ford's to-be-reported quarter's earnings and automotive revenues is pegged at 39 cents per share and $45.7 billion, respectively. EPS estimates for the third quarter have moved down by 2 cents in the past seven days. Ford surpassed earnings estimates in three of the trailing four quarters, and missed once. Ford Motor Company price-eps-surprise | Ford Motor Company Quote Ford's focus on higher-margin vehicles is likely to have supported its performance ahead of earnings. The company's U.S. sales fell 6.6% year over year to 509,764 vehicles in the third quarter of 2026, largely due to the planned phase-out of the Escape and Corsair. However, demand for large SUVs, including the Explorer and Expedition, along with sales of the F-Series, Maverick and Super Duty trucks, is expected to have supported revenues and product mix. Ford is prioritizing trucks, large SUVs, off-road models and premium trims to protect pricing and profitability. Reflecting confidence in this strategy, management raised its 2026 Ford Blue EBIT guidance to $5-$5.5 billion from $4.5-$5 billion, anticipating a favorable product mix through the year. Rivian: The company has an Earnings ESP of +7.38% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct. 29. The Zacks Consensus Estimate for Rivian's to-be-reported quarter's loss per share and revenues is pegged at 66 cents per share and $1.97 billion, respectively. Loss estimates for the third quarter have narrowed by one cent in the past seven days. Rivian incurred a lower-than-expected loss in each of the trailing four quarters. Rivian Automotive, Inc. price-eps-surprise | Rivian Automotive, Inc. Quote Rivian's third-quarter 2026 deliveries rose 45.8% year over year and 58% sequentially to 19,248 vehicles, exceeding the Zacks Consensus Estimate of 17,792 units. The launch of the more affordable R2 SUV, which began reaching customers in June, is likely to have fueled this growth by expanding Rivian's reach beyond its premium R1S and R1T models. The lower-priced offering is particularly important amid the expiration of federal EV tax credits, tariff pressures and subdued industry demand. Growth in software and services is another potential tailwind, with the Zacks Consensus Estimate for this segment's revenues at $622 million, up from $515 million in the second quarter and $416 million a year earlier. However, the R2 production ramp is expected to weigh on automotive gross profit again in the third quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report PACCAR Inc. (PCAR) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Paccar (PCAR), which belongs to the Zacks Automotive - Domestic industry, could be a great candidate to consider. This truck maker has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 4.64%. For the most recent quarter, Paccar was expected to post earnings of $1.33 per share, but it reported $1.43 per share instead, representing a surprise of 7.52%. For the previous quarter, the consensus estimate was $1.13 per share, while it actually produced $1.15 per share, a surprise of 1.77%. With this earnings history in mind, recent estimates have been moving higher for Paccar. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Paccar has an Earnings ESP of +1.04% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #2 (Buy), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on October 27, 2026. With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss. Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PACCAR Inc. (PCAR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Investors often view consistent earnings growth as a sign of a company's solid profitability. However, an even more compelling indicator is earnings acceleration, which can drive stock price gains. Historical market research has found that many top-performing stocks exhibit earnings acceleration before their share prices began moving higher.  To that end, Western Digital Corporation WDC, PACCAR Inc PCAR and Sprout Social, Inc. SPT are showing strong earnings acceleration and strong upside potential, making them compelling buys in October. Each of these stocks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS). Put simply, if a company's quarter-over-quarter earnings growth rate increases over a given period, it can be called earnings acceleration.  In the case of earnings growth, you pay for something that is already reflected in the stock price. However, earnings acceleration helps identify stocks that haven't yet caught investors' attention and, once secured, will invariably lead to a rally in share price. This is because earnings acceleration considers both the direction and magnitude of growth rates. An increasing percentage of earnings growth means that the company is fundamentally sound and has been on the right track for a considerable period. Meanwhile, a sideways percentage of earnings growth indicates a period of consolidation or slowdown, while a decelerating percentage of earnings growth may drag prices down. Look at stocks for which the last two quarter-over-quarter percentage EPS growth rates exceed the previous periods' growth rates. The projected EPS growth rate for the upcoming quarter is expected to exceed that of prior periods. EPS % Projected Growth (Q1)/(Q0) greater than EPS % Growth (Q0)/(Q-1): The projected growth rate for the current quarter (Q1) over the completed quarter (Q0) has to be greater than the growth rate from the completed quarter (Q0) over one quarter ago (Q-1). EPS % Growth (Q0)/(Q-1) greater than EPS % Growth (Q-1)/(Q-2): The growth rate for the completed quarter (Q0) over one quarter ago (Q-1) has to be greater than the growth rate from one quarter ago (Q-1) over two quarters ago (Q-2). EPS % Growth (Q-1)/(Q-2) greater than EPS % Growth (Q-2)/(Q-3): The growth rate from one quarter ago (Q-1) over two quarters ago (Q-2) has to be greater than the growth rate from two quarters ago (Q-2) over three quarters ago (Q-3). In addition to this, we have added the following parameters:  Current Price greater than or equal to $5: This screens out low-priced stocks.  Average 20-day volume greater than or equal to 50,000: High trading volume implies that the stocks have adequate liquidity.  The above criteria narrowed the universe of around 7,735 stocks to only 16. Here are the top three stocks: Western Digital develops and sells HDD-based data storage devices and solutions across global markets. WDC's expected earnings growth rate for the current year is 96%. PACCAR designs, manufactures, and sells light-, medium-, and heavy-duty commercial trucks worldwide. PACCAR's expected earnings growth rate for the current year is 18%. Sprout Social provides a web-based social media management platform worldwide. SPT's expected earnings growth rate for the current year is 37.8%.   Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Western Digital Corporation (WDC) : Free Stock Analysis Report PACCAR Inc. (PCAR) : Free Stock Analysis Report Sprout Social, Inc. (SPT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Is PCAR a good stock to buy? We came across a bullish thesis on PACCAR Inc on Astute Optics - US's Substack. In this article, we will summarize the bulls' thesis on PCAR. PACCAR Inc's share was trading at $109.81 as of September 30th 2026. PCAR's trailing and forward P/E were 23.60 and 15.06 respectively according to Yahoo Finance. graham tomlin/Shutterstock.com PACCAR Inc. (NASDAQ:PCAR) makes commercial trucks under the Kenworth, Peterbilt, and DAF brands, sells replacement parts, and provides financing and leasing. Its recovery from the truck downturn is central to understanding the stock. Truck operators still need to replace aging vehicles, and higher production could help PACCAR Inc. (NASDAQ:PCAR) grow earnings faster than sales. Read More: 15 AI Stocks That Are Quietly Making Investors Rich Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential In the second quarter of 2026, revenue edged up 0.5% to $7.55 billion, while net income rose to $752.0 million, or $1.43 per share, from $723.8 million, or $1.37 per share, a year earlier. That is encouraging but modest growth for a stock trading at 25.8 times trailing earnings and 20.5 times forward earnings, compared with typical levels of 19.6 and 13.1 in a broader comparison group. The premium suggests investors are already paying for further recovery. The bullish case rests on the truck replacement cycle. Weak freight demand can delay fleet purchases, but it cannot remove the need to replace old trucks. PACCAR Inc. (NASDAQ:PCAR) deliveries fell 22% in 2025, and annual revenue slid from $35.1 billion in 2023 to $28.4 billion in 2025, which leaves room for a rebound as orders pick up. Parts demand is helping in the meantime, with fourth-quarter 2025 Parts revenue reaching a record $1.7 billion, up 4%, because trucks already on the road still need maintenance. PACCAR Inc. (NASDAQ:PCAR) expects North American heavy-duty truck sales of roughly 250,000 in 2026, within a range of 230,000 to 270,000, and parts revenue is expected to grow 4–8%. Strong early-year orders from less-than-truckload operators and body builders support this view. The company also generated about $3.0 billion of free cash flow in 2025 and held $8.7 billion in cash and investments by the second quarter of 2026, enough to fund development and shareholder payouts. Most of its $14.7 billion of debt funds loans and leases in its Financial Services arm, so the balance sheet looks manageable. First-quarter earnings also looked better because the prior year included a one-time European litigation charge. Analyst forecasts back the thesis. Fifteen analysts have a mean target of $144.80, which implies about 18% upside from price of $122.73. The median target is $140, within a range of $125 to $164. A more cautious probability-weighted value of $136.51 implies about 11% upside. Analysts expect earnings per share of $5.98 over the coming year, up from $4.75 over the past twelve months. Over the past 30 days there were 17 upward revisions to full-year estimates and none downward, which points to improving expectations. Revenue is only just starting to grow again, so investors should watch whether stronger orders lead to lasting earnings gains. A weaker recovery would make these targets harder to support. Continued freight weakness is the key risk. Higher truck volumes need to turn into better profits, and for now PACCAR Inc. (NASDAQ:PCAR) keeps about 9 cents of every dollar of sales as net profit. Its Parts and Financial Services businesses, which normally provide support, both earned a little less in the first quarter of 2026 than in the quarter before, so they are still under some pressure. Changes to tariffs or the USMCA trade deal could disrupt production across the United States, Canada, and Mexico, while European emissions rules raise compliance costs. Limited charging and hydrogen infrastructure could also slow the shift to cleaner trucks, even though the company has invested heavily in new technology since 2016. If purchases are delayed, costs rise, or financing customers struggle to repay, earnings could fall short of the recovery already built into the stock price. Hedge fund positioning shows a strong signal for PACCAR Inc. (see why Madison Investments is bullish on PCAR). As per our database, 41 hedge fund portfolios held the stock at the end of the second quarter, up from 35 in the previous quarter. This suggests growing institutional interest in its truck recovery, recurring parts demand, and cash generation. By comparison, Caterpillar Inc. (NYSE:CAT) was held by 84 hedge funds, down from 87, Cummins Inc. (NYSE:CMI) was held by 60, down from 79, and Oshkosh Corporation (NYSE:OSK) was held by 32, down from 33. The divergence suggests institutional investors showed the strongest increase in conviction toward PACCAR Inc. (NASDAQ:PCAR), while Oshkosh Corporation (NYSE:OSK) remained relatively stable, Caterpillar Inc. (NYSE:CAT) saw a slight pullback, and Cummins Inc. (NYSE:CMI) saw reduced ownership interest as funds adjusted truck and industrial equipment exposure. Short interest data also paints a fairly mixed picture, with some investor caution around PACCAR Inc. (NASDAQ:PCAR), where 2.71% of shares are sold short. That is above Caterpillar Inc. (NYSE:CAT) at 2.03%, but below Cummins Inc. (NYSE:CMI) at 3.04% and Oshkosh Corporation (NYSE:OSK) at 3.73%. PACCAR Inc. (NASDAQ:PCAR) therefore attracts more bearish bets than Caterpillar Inc. (NYSE:CAT) but fewer than Cummins Inc. (NYSE:CMI) and Oshkosh Corporation (NYSE:OSK). Alongside rising hedge fund ownership, this leaves a relatively constructive sentiment picture, even though the premium valuation requires the truck recovery to deliver stronger earnings. The bullish case holds up if industry sales reach the outlook, truck deliveries recover, parts demand stays steady, and higher volumes lift earnings and cash flow while financing credit quality and costs remain under control. The key question is not simply whether the truck downturn is ending, but whether PACCAR Inc. (NASDAQ:PCAR) can turn recovering orders and steady parts demand into enough earnings growth to justify a valuation that already expects better conditions. Previously, we covered a bullish thesis on Deere & Company (DE) by Best Anchor Stocks in May 2025, which highlighted margin resilience, technology leadership, and cyclical recovery. DE's stock price has appreciated by approximately 32.19% since our coverage. Astute Optics - US shares a similar view but emphasizes on PACCAR's truck replacement cycle, recurring parts demand, and cash generation. PACCAR Inc is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held PCAR at the end of the second quarter which was 35 in the previous quarter. While we acknowledge the potential of PCAR as an investment, we are concerned about high interest rates and high oil prices. We believe the best place to invest in this environment is AI companies. If you are looking for an AI stock that is more promising than PCAR and that is trading below its cash and investments, check out our report about this cheapest AI stock. Disclosure: None.

Paccar Inc (PCAR), with a $58.85 billion market capitalization, designs, manufactures, and distributes light-, medium-, and heavy-duty commercial trucks globally under the Kenworth, Peterbilt, and DAF brands. Headquartered in Bellevue, Washington, the company also supplies aftermarket parts, diesel engines, and financial services to truck customers and dealers worldwide. The company is expected to report its third-quarter results for fiscal 2026 soon. Ahead of the earnings release, Wall Street analysts expect its bottom line to grow. - Warren Buffett Says America Is Doing Something 'Unsustainable' and Doesn't Know If We Have 2 Years or 20 —'This Can't Go On Forever' - 'It's Your Only Option' — Late Billionaire Charlie Munger, 99, Shared His Iron Rule for Overcoming Life's Hardship. 'Everybody Struggles, But You Can't Quit' - Rocket Lab Steps In Where SpaceX Just Walked Away - Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Analysts expect Paccar to report diluted earnings of $1.61 per share for Q3, up 43.8% year over year (YOY). The company has exceeded consensus estimates in two of the four trailing quarters and matched them in two instances. For full fiscal year 2026, Wall Street analysts expect Paccar's diluted EPS to grow 18% to $5.91, followed by a 22.3% improvement to $7.23 in fiscal 2027. Investors are weighing solid earnings against the cyclical nature of truck demand and uncertainty around the 2026-2027 freight cycle. Over the past 52 weeks, the stock has gained 12%, and year-to-date (YTD), it has increased 2.1%. Meanwhile, the broader S&P 500 Index ($SPX) has increased by 15.2% and 12.1% over the same periods, respectively. Therefore, the stock has underperformed the broader market over these periods. We now compare Paccar's performance with that of its sector. The State Street Industrial Select Sector SPDR ETF (XLI) has increased 10.5% over the past 52 weeks and 9% YTD. Therefore, the stock has outperformed its sector over the past year but has underperformed this year. Paccar's second-quarter results reflect strong orders and improved freight rates. However, revenue was almost flat YOY at $7.55 billion. Truck sales improved modestly to $5.25 billion, although new truck deliveries dropped YOY. Moreover, EPS grew 4.4% YOY to $1.43, above the $1.33 Wall Street analysts expected. On July 9, the U.S. EPA issued clarifying guidance on emissions rules that should help customers as they decide which trucks to buy in the second half of this year and in 2027. Wall Street analysts have been bullish about Paccar's prospects. Among the 17 analysts covering the stock, the consensus rating is "Moderate Buy." The rating configuration has remained largely unchanged over the past three months. Veralto has five "Strong Buy" ratings, one "Moderate Buy," and 11 "Holds." The mean price target of $142.93 implies a 27.8% upside from current levels, while the Street-high price target of $164 implies 46.7% upside. On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how heavy transportation equipment stocks fared in Q2, starting with PACCAR (NASDAQ:PCAR). Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings. The 12 heavy transportation equipment stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 8.6% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6% since the latest earnings results. Founded more than a century ago, PACCAR (NASDAQ:PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry. PACCAR reported revenues of $7.55 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates. The market seems disappointed with the results as the stock is down 6.7% since reporting and currently trades at $124.50. Is now the time to buy PACCAR? Access our full analysis of the earnings results here, it’s free. With its first trailer reportedly built on two sawhorses, Wabash (NYSE:WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods. Wabash reported revenues of $417.2 million, down 9.1% year on year, outperforming analysts’ expectations by 3.6%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and revenue guidance for next quarter exceeding analysts’ expectations. The market seems happy with the results as the stock is up 7.5% since reporting. It currently trades at $14.31. Is now the time to buy Wabash? Access our full analysis of the earnings results here, it’s free. Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE:GBX) supplies the freight rail transportation industry with railcars and related services. Greenbrier reported revenues of $576.5 million, down 31.6% year on year, falling short of analysts’ expectations by 5.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations significantly. Greenbrier delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. As expected, the stock is down 9.6% since the results and currently trades at $43.26. Read our full analysis of Greenbrier’s results here. Oshkosh (NYSE:OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry. Oshkosh reported revenues of $2.92 billion, up 6.7% year on year. This print topped analysts’ expectations by 3.3%. It was a very strong quarter as it also logged full-year revenue guidance beating analysts’ expectations and a beat of analysts’ EPS estimates. The stock is up 1.4% since reporting and currently trades at $157.08. Read our full, actionable report on Oshkosh here, it’s free. Operating under the trade name TrinityRail, Trinity (NYSE:TRN) is a provider of railcar products and services in North America. Trinity reported revenues of $485.1 million, down 4.2% year on year. This number surpassed analysts’ expectations by 2.2%. Zooming out, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates and a miss of analysts’ EBITDA estimates. The stock is down 22.8% since reporting and currently trades at $28.32. Read our full, actionable report on Trinity here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

PACCAR (PCAR) is back in focus after reporting second quarter 2026 earnings of $1.43 per share, which topped estimates and came in higher than the same period a year earlier. PACCAR shares closed at $125.34, with the stock down 6.37% on a 1 month share price return and 4.34% over the past week. However, the 90 day share price return of 13.56% and 1 year total shareholder return of 28.46% point to momentum that has built over a longer horizon. Compare PACCAR's recent earnings beat and share price swings with a curated 44 high quality undervalued stocks that also combine solid cash generation with balance sheet strength. PACCAR stock has pulled back despite the earnings beat and strong longer term returns. Does that recent weakness leave enough upside in the current valuation to keep the risk reward balance tilted toward buyers? The most followed narrative values PACCAR at $141.03 per share, above the last close at $125.34. That gap is built on specific growth and margin expectations rather than short term price moves. Read the complete narrative. Read the complete narrative. Want to see what underpins that higher valuation for PACCAR? The narrative focuses on revenue compounding, margin uplift, and a richer earnings multiple over time. Result: Fair Value of $141.03 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, PACCAR’s story can change quickly if truck demand weakens for longer than analysts expect or if tariffs and trade policies push costs higher and margins lower. Find out about the key risks to this PACCAR narrative. Does the mix of risks and rewards around PACCAR leave you feeling cautious or optimistic right now? Act while the information is fresh and review the full breakdown of 3 key rewards and 1 important warning sign If PACCAR has sharpened your focus on quality, do not stop here. Use the Simply Wall Street Screener to quickly spot other opportunities that deserve a closer look. Target dependable income by reviewing companies in the 12 dividend fortresses that prioritize consistent cash returns to shareholders. Spot potential value opportunities early by scanning the 19 high quality undiscovered gems that pair solid fundamentals with relatively low market attention. Reduce portfolio volatility by checking out the 74 resilient stocks with low risk scores that show resilient financial profiles and lower risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PCAR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

A month has gone by since the last earnings report for Paccar (PCAR). Shares have lost about 3.5% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Paccar due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for PACCAR Inc. before we dive into how investors and analysts have reacted as of late. PACCAR reported second-quarter 2026 earnings of $1.43 per share, beating the Zacks Consensus Estimate of $1.33 by 7.5%. The bottom line increased 4.4% from $1.37 in the year-ago quarter. Consolidated revenues (including trucks and financial services) were $7.55 billion, up from $7.1 billion in the corresponding quarter of 2025. Truck, Parts and Other revenues of $7 rose 0.5% year over year. Higher truck profitability and record parts revenues supported results, while global truck deliveries declined 1.5% to 38,700 units. Truck revenues were $5.25 billion in the quarter, edging up from $5.24 billion a year earlier. Parts revenues increased 1.5% to a record $1.75 billion, reflecting continued strength in the aftermarket business. Financial Services revenues were $549.7 million compared with $547.7 million in the prior-year quarter. Intersegment eliminations and other were $3 million. Geographically, revenues from the United States and Canada declined 3.3% to $4.59 billion. European revenues advanced 6.9% to $1.79 billion, while revenues from other markets climbed 7.3% to $1.17 billion. Truck pretax profit rose 16.7% year over year to $360.5 million from $308.8 million. North American deliveries fell to 22,000 units from 23,000. Europe improved to 11,200 units from 10,600, while other markets declined to 5,500 units from 5,700. The higher second-quarter build rates were attributable to strong orders and improving freight rates. PACCAR expects constrained freight capacity and an aging fleet to create opportunities for customers to replace trucks with newer, more fuel-efficient models. PACCAR Parts generated pretax income of $417 million compared with $416.5 million a year ago. The modest profit increase came alongside record quarterly revenues and continued investment in distribution and logistics capabilities. The company expects improving North American freight conditions to support truck utilization and parts demand. Its parts network includes 21 distribution centers serving more than 2,000 DAF, Kenworth and Peterbilt locations and over 350 TRP stores. First-half parts revenues increased to $3.46 billion from $3.41 billion. Pretax profit for the six-month period declined to $819.3 million from $843 million. Financial Services pretax income was $124.1 million compared with $123.2 million in the year-ago quarter. Provision for losses on receivables increased to $39.4 million from $29.2 million, partly offsetting steady finance margins and an improving used-truck market. The business ended the quarter with a portfolio of 222,000 trucks and trailers and $22.3 billion in total assets. PacLease’s fleet stood at 37,000 vehicles, and the segment issued $1.38 billion of medium-term notes during the first half. First-half Financial Services pretax income declined to $239.6 million from $244.3 million. Revenues increased to $1.09 billion from $1.08 billion over the same period. Within Truck, Parts and Other, cost of sales and revenues declined to $5.99 billion from $6 billion. Research and development expenses rose to $114.3 million from $112.9 million, while selling, general and administrative expense eased to $138.6 million from $139.2 million. PACCAR generated $700.8 million in operating cash flow during the quarter. For the first half, operating cash flow was $1.67 billion, while capital investments and research and development expenses totaled $274.2 million and $223.4 million, respectively. Cash and marketable securities were $8.67 billion as of June 30, 2026, compared with $9.25 billion at Dec. 31, 2025. The company maintained its 2026 U.S. and Canada Class 8 industry retail sales forecast at 230,000-270,000 trucks. It expects European above 16-tonne registrations of 290,000-330,000 units, up from the previous estimate of 280,000-320,000. The South American above 16-tonne market remains projected at 100,000-110,000 trucks. For 2026, capital expenditures are now expected between $700 million and $750 million, down from the previous estimate of $725-$775 million. Research and development expenses are now projected to be in the band of $450-$480 million compared with the previous estimate of $450-$500 million. PACCAR expects to deliver approximately 42,000 trucks in the third quarter, up from 38,700 units in the second-quarter. It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 5.75% due to these changes. At this time, Paccar has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the second quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Paccar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PACCAR Inc. (PCAR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, July 28, 2026 at 12:00 p.m. ET Chief Executive Officer - R. Preston Feight President - Kevin D. Baney Senior Vice President and Chief Financial Officer - Brice J. Poplawski Director of Investor Relations - Ken Hastings Operator: Good morning, and welcome to PACCAR's Second Quarter 2026 Earnings Conference Call. Today's call is being recorded. And if anyone has an objection, they should disconnect at this time. I would now like to introduce Mr. Ken Hastings, PACCAR's director of investor relations. Mr. Hastings, please go ahead. Ken Hastings: Good morning, and welcome to PACCAR's second quarter 2026 Earnings Conference Call. All lines will be in-- My name is Ken Hastings, PACCAR's director of investor relations. And joining me this morning are R. Preston Feight, Chief Executive Officer Kevin D. Baney, President, and Brice J. Poplawski, Senior vice president and chief financial officer. Certain information presented today will be forward-looking and involve risk and uncertainties that may affect expected results. For additional information, please see our SEC filings and the Investor Relations page of paccar.com. I would now like to introduce Preston Feight. R. Preston Feight: Thanks, Ken. Good morning, everyone. In the second quarter, PACCAR's outstanding employees did an excellent job of increasing production to provide our customers with the highest quality trucks and transportation solutions in the industry. Their hard work, high performance, and dedication is enabling PACCAR to continue increasing build rates in our factories around the world. PACCAR's second quarter revenues were $7.5 billion and net income was $752 million, an increase of 24% from the first quarter. These results were driven by strong truck division performance. PACCAR Parts performed well and achieved record quarterly revenues of $1.75 billion and quarterly pre-tax income of $417 million. PACCAR Financial also performed well, achieving pre-tax income of $124 million. Now looking at this year's U.S. and Canadian heavy truck market. the U.S. economy is growing, and the truck market is strengthening. As freight rates have increased and regulatory clarity has been provided. First half retail sales were 105,000 trucks. And we expect that the second half could be around 145,000 resulting in a full year market size of around 250,000 units. Europe, the economy is growing modestly, and the truck market is healthy. We project the 2026 European above 16-ton market size to be around 310,000 trucks. DAF's premium trucks are providing customers with the latest technology, and best operating efficiency. This year's South American above 16-ton market where DAF trucks are desired by customers for their durability and advanced technology, is expected to be in the range of 100,000 to 110,000 vehicles. In the second quarter, PACCAR's truck deliveries increased from 33,000 to 38,700. Third quarter deliveries are estimated to grow and be around 42,000 as build rate increases are partially offset by the normal European summer shutdown period. PACCAR's truck parts, other second quarter gross margins increased from 13.1% to 14.4% due to very good overall performance. Third quarter margins are forecast to be a strong 14.5% and then further increase in the fourth quarter. PACCAR's exceptional range of trucks, compelling parts business, industry-leading financial services, and customer-focused product development strategy, position the company well for an excellent second half of 2026 and the future. Kevin will now provide an update on PACCAR Parts, financial services, and other business highlights. Kevin? Kevin D. Baney: Thank you, Preston. PACCAR Parts achieved record second quarter revenues of $1.75 billion and good pre-tax profits of $417 million. Gross margins increased to 29.8%. Increasing truck utilization is beginning to lead to more parts and service activity, and we expect higher parts sales growth in the second half. Revenue from PACCAR Parts fleet services program grew 8% in the second quarter, which is an indicator customers are beginning to increase parts purchases. For the full year, we estimate parts sales growth in the range of 3% to 5%. PACCAR Financial Services pre-tax income was a robust $124 million. Their high performance is a result of steady finance margins and strengthening used truck markets. Earlier this month, the EPA clarified a key NOx-related emissions regulation. The clarification extends the timeline to introduce 35-milligram NOx engines. Next year, customers will be able to buy the current generation of engines with an associated nonconformance penalty. This will be beneficial for customers as it will ensure that new technology is fully validated before being purchased by customers. It is also likely to have a positive impact on the size and strength of next year's truck market. This year, PACCAR is planning capital investments in the range of $700 million to $750 million, and R&D expenditures in the range of $450 million to $480 million. PACCAR is investing in customer-focused technology and innovation projects including advanced flexible manufacturing, that enhances efficient local-for-local production, the development of next generation clean diesel engines, industry-leading hybrid and electric powertrains, integrated vehicle and connected vehicle services. We are looking forward to the success that our customers, dealers, and PACCAR will experience in the coming quarters and years. We are now pleased to answer your questions. Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press one on your telephone keypad. To withdraw your question, press one again. We ask that you pick up your handset when asking a question and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Stephen Volkmann from Jefferies. Steven, your line is open. Please go ahead. Stephen Volkmann: Thank you. Good morning, everyone. Hi, Steven. Good morning. I am wondering, if we can dive in on the gross I think this quarter came in a bit stronger than you had expected. What are the moving parts that would explain that? R. Preston Feight: Sure. There are a couple things. Thanks for the question. Probably one of the things is volume of trucks was higher. And then most significantly, I think our local production is benefiting PACCAR. I also think that the team did a great job in cost controls on price versus cost was favorable for us. Even more than we thought it would be, so that was also a positive. Those are the biggest majorities of what influenced it. And as I said, local-for-local production provides some tariff benefits to us. Stephen Volkmann: Okay. Great. And what are you seeing in the market relative to price? Because you have a little bit more, I guess, local-for-local than some of your competitors. Are you seeing overall pricing kind of coming up in the market, gives you some opportunity? R. Preston Feight: Yeah. I think what is happening in the general market is our customers are starting to experience better operating conditions for themselves. Spot rates are up 20%. Contract rates were up 6.5%, so we are seeing favorability for how they are operating their businesses. I think the driver pool has become a little bit more constrained, which is helping them realize operating benefits. And I think we all share in that together. So we have seen some favorability in terms of how we are able to price trucks as we look forward. Great. Thank you, guys. You bet. Have a great day, Steven. Operator: Next question comes from the line of Jerry David Revich from Wells Fargo. Please go ahead. Jerry Revich: Yes. Hi. Good morning. Good afternoon, everybody. Hi. I thought the profit per truck performance was especially strong in the quarter. I am wondering, was there any EPA refund benefit or anything along those lines that contributed to the really strong cost improvement? Brice J. Poplawski: You know, I think if you look at that performance, it was largely driven from a net price-cost benefit. And the biggest part of that was really the team's operating effectiveness and good warranty performance by the team. Efficiencies to the local-for-local, but we did have a net tariff benefit We had some tariffs. We have to pay, of course, with the raw material stuff, and then we had some offset tariffs But the net was the bigger part of it was really operating strength. Jerry Revich: Thank you for the color. Is it possible just to quantify the refund that you saw in the quarter just put a finer point on the run rate profits per truck? No. Brice J. Poplawski: We did not put that out, and we think that it will be remain strong. So we think that the tariff position we had in the second quarter will look similar to the third quarter. that is really great to hear. Jerry Revich: And then what we had been hearing until the EPA's new ruling was that you folks the fourth quarter deliveries were pulling back discounts and so the price realization was set to improve by over $5,000 in the fourth quarter versus the third quarter. Can you update us that still happening considering the more phased approach to the EPA 2027 rollout? R. Preston Feight: I think the EPA has done a very nice job in paying attention to what the industry's needs are. I appreciate the work the administration has done in helping make sure we put valid fully validated products out into the marketplace. So it is been nice to work with the ATA and the customers and the administration to put a government business relationship in place that is working well. I think what they did is they took not all of the prebuy, but they kind of smoothed it And I think it creates a stronger position for 2027 to be a good market for the industry. And so I think that is kind of how we experience in that. And if it is a good market, for our customers, then it tends to be a good market for us as well. Yep. Thank you. You bet. Have a great day. Operator: Your next question comes from the line of Tami Zakaria from JPMorgan. Please go ahead. Tami Zakaria: Hey. Good morning. Congrats on the excellent results. Two questions. The first one is on the gross margin guide for the third quarter. It seems like you are expecting somewhat sequentially flattish gross margin. Despite deliveries being higher and North America probably being higher mix, given the shutdowns in Europe? So what underpins that margin guide? Why would not margin be better sequentially? Is there any cost headwind you are expecting in this third quarter that you did not have in the second quarter? R. Preston Feight: You know, great question, Tami. Thanks for asking. There are a couple of things that are a factor. One, you are fully aware of, right, which is that as truck increases, it has a ratio mix to parts. That increase has an impact, so that is why it is around 14%. And there also happens to be in the third quarter, probably the mix of our actual trucks we are building is shifting a little bit. Those two things together. So maybe a little less vocational, a little bit more fleet trucks that we are building. So put, we stay with the strong margin. But the nice thing is with the higher build, we see profit increasing. In the quarter and continuing to strengthen through the year. Tami Zakaria: Got it. That is helpful. And then my second question is on the NOx compliant engines. If I remember correctly, you expected that to be call it $8,000 to $10,000 more expensive than the noncompliant one, but with the NCPs that have been announced, it seems like the fine could be lower than the cost of a compliant engine. Just wanted to know if that is what if that is how you interpreted it. And if so, how could that impact your customer behavior next year when the EPA and NOx regulation goes into effect? R. Preston Feight: Hey, Tami. Thanks for the second question. Good question. I think a lot of information came out just as recently as July 9 on that when the EPA made the announcement. It is still preliminary. It is a notice of proposed rulemaking, so there is still a comment period that we are in. So things could even change from here. We will have to see what that looks like. We probably will not get a final answer till much later in the year. But the way it is currently proposed is we would expect to see NCPs running at something like the $6,000 to $7,000 range per truck. And as you noted, the cost of fully compliant 35-milligram engines would likely be higher than that. But I think a lot of what went into the discussion was the desire to make sure that the engines from all the manufacturers and engine companies were fully validated and the customers had enough time with them that was a big portion of what happened here. So I think the result of that is, as shared earlier, means that the end of the year will improve and then I think it bodes well for a good 2027 operating condition for the customers and for us. Understood. Thank you. Operator: Great. Your next question comes from the line of Rob Wertheimer from Melius Research. Please go ahead. Rob Wertheimer: Thank you. Preston, you just touched on this. I think maybe Kevin did earlier, but, you know, the EPA shift or closed rule may benefit 2027 a bit. And my question is a bit of a soft one, but when you talk to customers now, are people prebuying, or do they just need trucks? You know, there is there are a couple things that maybe tightened up fleet dynamics. And so I am curious about maybe it is a soft question, but like what people are buying for. And then in the 2027, those comments around a continued prebuy or more just that people have confidence in the engine and are not shying away from it. Thank you. R. Preston Feight: Yeah, sure. Good question. Good to think through that a little bit. I think part of what is happening is they have been in a tough operating condition. Our customers, many of them, been in a tough operating condition for a few years now. That meant they have been careful with capital. They have probably kept trucks longer than they would have wanted to, and you can see that especially as a pronounced first half of this year. Where it really showed up in a 105,000 trucks of retail. I think that now what is happening is they are trying to get back into their normal operating models. The trucks we are building today are the most fuel efficient trucks we have ever built, so they are very helpful to customers to operate them. The driver environment's the best it is ever been. The engine's performing the best they have ever performed. We have a great product line out there, and I think that since they have the operating capital to use, they would like to be using those trucks. Since they are just starting to do that. It seems like it is going to ramp through the second half. Like I said, probably 145,000 retail in the second half. And then I think we should expect a very healthy market in 2027. Okay. Thank you. Rob Wertheimer: And then just the EPA, does that advantage any of your competitors more through sort of credits? Is that any headwind to market share or price in 2027? I will stop there. Thanks. R. Preston Feight: Well, actually, I think that the maybe the situation is very leveling now and maybe to our advantage a little bit. In that the NCPs are allowing everybody to make sure we get the right products out there validated. So the customers get the experience with the products. They will get the experience with our products and the quality of product we are able to introduce in a more gradual way versus it being step changed But the fine level if you look at the shape of the curve for the fines, for most manufacturers, they may be all manufacturers, as it is currently written. The fine's going to be in that $6,000 to $7,000 range if they choose to offer. Today's products. And so that kind of levels it out. Also, thank you. Operator: Your next question comes from the line of David Raso from Evercore ISI. Please go ahead. David Raso: Hi. Thank you. Your comments about 2027. Can you take us through your thoughts right now when you are speaking to your suppliers about the cadence Q4 into Q1? And then second question on the parts business. Can you help us get a little more comfort with the parts growth exiting 2026? Obviously, the back half of the year has to step up a little bit. Just trying to think that through and not to give 2027 parts guidance, but just how to think about that growth rate exiting 2026 as we think about 2027. Thank you. R. Preston Feight: Thanks, David. I will take the first one, then Kevin can cover the parts one. We can add anything he wants to the first one too. The quarterly cadence of the market is as I kind of was just describing with Rob, is I really see that the market's ramping up. We are certainly full through the third quarter, mostly full for the year, probably like 90% full for the year even as we are ramping up production. At a rate that is as quick as is reasonable to do. So that is kind of limiting the market size a little bit right now. So we will sell out of build slots probably in the next month or two here. And as we are out of build slots, then I think there will be carryover into 2027. And then I think because of the way the EPA implemented this approach, it will allow people to have the product they want next year, which I think they will be in a good operating condition. And so it will help the cadence of the year next year start strong and probably be strong through the year. Kevin D. Baney: And just to add to what Preston said, PACCAR was the first to announce build rate increases earlier in the year, and so a lot of strong communication with the supply base on the rate of increase throughout the year. So feel pretty good about the support we are getting, at the elevated build levels. And then on the parts side, David, parts will grow at a faster rate in the second half based on the strength of the truck market. Capacity has come out, utilization has increased, freight rates have increased. We are seeing, customers buying more parts now. A good indicator is that the larger customers are buying through our fleet services program. We have seen an 8% increase quarter over quarter. And then also Europe is running strong. And so as we see the stronger truck market second half of this year and into next year, we are confident with the parts growth. Thank you. Operator: Your next question comes from the line of Chad Dillard from Bernstein. Please go ahead. Chad Dillard: Hi, good afternoon, guys. This is Chad. I have a question for you on EPA 2027. So noncompliance is about $6,000 to $7,000. to comply with 35 milligrams, you know, plus $10,000. So assuming the EPA rules hold, how does that change your product strategy? So will you stick with the 200-milligram product and just pass that extra cost on to the customers? Or are you thinking with going as planned with the 35-milligram product? R. Preston Feight: Great question. We are planning on selling the current product to our customers. That is the engagement we have had with many, many customers is that is their preferred approach is to ease into this thing. So both for our excellent PACCAR engines and our partner's engines Cummins. And the plan is to begin 2027 selling those engines. Then getting our customers experience with the 35-milligram engines as the year progresses. But as you noted, if the numbers stay where they are and it is $6,000 to $7,000, there is still an advantage for them in taking the current product. So that is kind of how we think the year shapes up. Which is, I think, favorable for the industry. I think it is a great approach for the industry. Chad Dillard: Okay. Great. And second question, coming back to tariffs and just to be clear, the EPA refund, was there anything in 2Q or through the rest of the year? And then secondly, assuming things as we are trying to think through the rules stay where they are today, how do we think about the year-on-year bridge to 2027 for tariffs? R. Preston Feight: I think that the tariff situation has become a little bit more clear, Chad, and that what is in place is durable. There does not seem to be any real challenge to that. I think it is favorable for PACCAR. In that our teams, as we shared previously, but I was and I have been in all our factories just in the last month, and I just cannot tell you how cool it is to see those great people building every model of truck in the factories in Ohio and in Texas. In a way that is supportive to the approach of the administration of building local-for-local. So great job on that. That gives us a stable tariff operating environment. So looking at that, and, yeah, there is a little bit of benefit in Q2, but that will carry forward in Q3. And the bigger effect of tariffs really ends up being Section 232. As you look forward into next year. Great. Thank you. Great. Okay. Operator: Your next question comes from the line of Kyle Menges from Citi. Please go ahead. Kyle Menges: Great. Thank you. I was hoping just if we could hone in on margins a little bit, maybe as we get into 2027. I mean, you sound a little bit more confident in volumes. And then easing into the new truck platform, I guess, in 2027, the new engine platform. And I am just curious how you are thinking about margin ramifications maybe as you start with selling the 2026 engines in the first half of next year, but then start to produce on the new engines and just how to think about margin impact. As you do that. R. Preston Feight: Yeah. I think that the NCPs that will be out there are fees that will be paid not to the they will be paid to the government. So that is a straight pass through for us, and that is how we would look at that. So it really should not have any effect on margin. We are not going to try to make a profit on those penalties. that is just a pass through. We think the strength of the market will be good for PACCAR in 2027. Should do great. And we think that the, again, the allowance to sell the current model of your products throughout next year. is a-- which is a distinct possibility what we will do with an introduction of 2027. Feels really good. I feel like it is the right approach, and should be positive. Kyle. Kyle Menges: Got it. And then and also on parts, I mean, it sounds like maybe some of the larger fleet customers contributing more to the parts demand this year. So just curious, as you see the over the road market come back and maybe a recovery become more broad based, and you see more demand pick up from small and midsized fleets? Just how to think about parts margins maybe as that mix within the customer base shifts a little bit? I mean, I would imagine maybe small, midsize fleets, they would be buying more TRP parts, which I think come at a lower margin. So just how to think about that. Kevin D. Baney: Yeah, Kyle. So the reference to the fleet services was a good indicator for the large fleets, but we are also seeing the increase in the small to midsize as well, and it is just a reflection of the utilization picking up across the industry. So that is good. We are also seeing an increase in our TRP parts sales as well. So I think those are all strong indicators of improved parts sales. And then just on the margin side, we still have the newest truck platforms in the industry. With strong proprietary content, the engine business as well. And so I think talked earlier calls about the focus on service only required maintenance, and service side as well. And as the truck side improves, I think we will just see all indications improve on the parts side. Helpful. Thank you. Operator: Great. Your next question comes from the line of Jamie Lyn Cook from Truist Securities. Please go ahead. Jamie Cook: Hi, good morning, thanks for your time, and congrats on a nice quarter. I guess my first question, the deliveries surprised to the upside relative to your guide, but U.S. and Canada was down, which I guess I was surprised by. I think you implied every region, so it should be up. So what is driving that? And within the 42,000 deliveries in the third quarter, what are you expecting for U.S. and Canada? And I guess, Preston, it sort of dovetails into the margins because the margins were very impressive with U.S. and Canada down. I always thought that was one of your more profitable regions, so correct me if I am wrong. And then I guess my second question on the third quarter margins, you mentioned mix, like a little more fleet, a little less vocational. Could you just help us understand, you know, what you are seeing across TL, LTL, and vocational in terms of, like, the order book. And is fleet being higher just a function of demand improving there? Is there something know, more negative happening on the vocational side? Thanks. I know there is a lot in there. R. Preston Feight: Wow, Jamie. That was that was a lot. Let me let me try to work from the back of it to the front. You are right. There is some mix shift, and it is it is not about really anything other than the fleets and the truckload carriers increasing their demand in the months we are in now and looking forward that is probably the biggest thing that is affecting the margin there. And then from a build mix, standpoint, if I just take it more generically, I would say that we did have a few hundred trucks that we did not even deliver in the there is probably a difference in the U.S. that we saw just from some supplier constraints that we are starting to experience as the market ramps up. And so we think those will come through in the quarter, and we do expect healthy demand improvement or not even demand, but delivery improvement in the U.S. markets. Then we had good European performance. Team did a great job there in the quarter. And so I think you put the strong U.S. performance, the increasing truck market in the U.S., the strong European performance. They were all factors in it. All came together well. And we think that will continue. Thank you. Yeah. You bet. If I missed something there, feel free to jump in on that because there was a lot. You did a great job. I am good. Thanks. Alright. Take care, Jamie. Operator: Your next question comes from the line of Steven Fisher from UBS. Please go ahead. Steven Fisher: Thanks. Good morning. Just on the U.S./Canada retail outlook, sounds like you are centering around 250,000 there. Just curious with half the year to go, just why not narrow the range at all? Are there still scenarios where you think you could reasonably say either 230,000 or the 270,000 end? R. Preston Feight: You know, I think that we left it that way, but it is really calling a midpoint at 250,000. I think the question still centers out around inventory and what happens with inventory in. I think we have a great understanding of what build is going to be and now it is just what happens with inventory. Okay. Steven Fisher: Makes sense. And then I am not sure if I missed it on the parts side relative to that new 3% to 5% range for the year. Q3, are we thinking that it will sort of be at the low end of that 3% to 5% or somewhere between? Anything specific by the way, if I missed it on Q3 guide? For parts? Kevin D. Baney: Yeah. We did not provide Q3 guide, but what I will add is that we did see we did see sequential growth in Q2 as we went through the quarter. And so that is why I just called it the 3% to 5% for the second half, and we will we will see growth continue throughout the back half of the year. R. Preston Feight: But I do not think we think it is at the low side of that range. I think we think it is at high side of that range. Okay. Terrific. Thank you. Operator: Your next question comes from the line of Angel Castillo from Morgan Stanley. Please go ahead. Angel Castillo: Hi. Good afternoon. Thanks for taking my question. Preston, I just wanted to go back to the discussion around the EPA 2027. I think the 2027 dynamic for unit sales makes sense. But some of the NCPs, specifically to the ability to use credits to sell or to offset Just curious, why would not that, I guess, create the ability for some competitors to ultimately sell the current engine at no incremental penalty? And then maybe to the extent that there is any implications of that, I guess, what are the impacts on potential for passing through price next year on the new engine or just competitive dynamics on price? R. Preston Feight: Yeah, Angel. I do not tend to want to talk about what other competitors are going to do from their strategies. I can just kind of see what the public qualifications are out there, and I know where people to engines are qualified. And so what we see is if the engines are qualified at today's level, then the penalties are going in that $6,000 to $7,000 range for kind of everybody. Operator: And, of course, people can-- Please hold. We are experiencing technical difficulties. Please stand by while we address the issue. Test, can you hear? Jade, can you hear us? David, can you hear us? We can hear you all. Yes. Thank you all for standing by. We will now resume the broadcast. R. Preston Feight: So, Angel, if you are still there, I hope you could hear the answer. If not, let me know, we will come through it. Jade, why do not we go to the next question? And Angel can get back in queue if he wants to do that again. Angel Castillo: Can you hear me? Yep. We got you. Hey, Ken. Yeah. Go ahead. Oh, perfect. Alright. Thank you. Yeah. I guess just maybe switching gears a little bit. Wanted to ask a separate one, a little bit bigger picture and more technology. I guess, I noticed one of your partners had launched, you know, a second generation hardware and driverless freight routes with a different OEM partner. So just wanted to get an update on how some of your partnerships with Aurora are progressing, how you see that evolving over time? Just any kind of plans here to start kind of approving driverless operations or just what your strategic kind of approach here is going to be on some of those autonomous innovations. R. Preston Feight: Yeah. PACCAR is developing its autonomous vehicle platform. We are really happy with the progress we are making in that. We have good partners in Aurora, Stack AV, Kodiak, and the others that we work with. So we feel good about the progress we are making on that. It is significant. We have no plans to take the driver out. At this point in time. Understood. Thank you. Operator: Your next question comes from the line of Scott Group from Wolfe Research. Please go ahead. Scott Group: Hey. Thanks. Afternoon. So all we keep hearing from truckers is a supply-driven cycle. Rates are going up a lot, but demand sort of stable, fewer drivers. Is that change the way you think about what an upcycle could look like in terms of where orders and builds can go? So are you hearing about fleet growth? Or do you think that is less likely now? And sort of supply-driven tightening? R. Preston Feight: Yeah. Great question. I think that if you just look at it in general, while freight tonnage index is increasing only modestly, it is at a high level. So it is not as if there is not a lot of freight being hauled out there. And I think with the GDP growth that the U.S. is experiencing, that is positive because as we all know, over 70% of the freight is moved by trucks. So as the economy grows, the truck grows. And I think that the reshoring and local-for-local efforts that are happening in the industrial base right now are good for trucks and especially good for PACCAR. So I think all of those things give us confidence in where the market should head in the coming year or two here. Okay. Scott Group: And then just lastly, I have got one very short-term and then one longer-term. Mechanically, if someone placed an order that near-term was a prebuy for delivery in 2026. Like, are they able to now push that to 2027? Are you seeing that? And then maybe just my longer-term, like, thought, like, as we enter an up cycle, like, where do you think ultimately gross margins can get to relative to where they have been in prior cycles? R. Preston Feight: I think what we think is that the there was many people thought that there would be a huge prebuy at the end of the year, and I think that what we kind of expect now is with the smart positioning that the EPA did, it will be just a continued improved cycle through the balance of the year. With a stronger 2027 and not much drop-off That feels pretty positive to me. And as far as the margins longer-term, I think, you know, we have done a good job of investing in the right products. So that our team has produced the best trucks that can be built. And I think we are building in the right locations. So that is also positive for margin. And we feel good about the company's short, mid, and long term performance. Thank you. You bet. Operator: At this time, there are no further questions in the queue. Are there any additional remarks from the company? Ken Hastings: We would like to thank everyone for joining the call, and thank you, operator. Operator: Thank you as well. Ladies and gentlemen, this concludes PACCAR's earnings call. Thank you for participating. You may now disconnect. Before you buy stock in Paccar, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Paccar wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Paccar. The Motley Fool has a disclosure policy. PACCAR (PCAR) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool